The lawsuit alleges that Visa has unlawfully set the interchange fees that are charged to merchants each time a customer makes a purchase with a Visa credit card. The suit also charges Visa with creating and imposing rules and restrictions on merchants that preclude them from being able to negotiate lower fees.

This marks the second retailer lawsuit to make news recently, as merchants struggle with increased fees. A coalition of retailers including CHS Inc. recently filed an antitrust class-action lawsuit against many of the major banks. Unlike that suit, the new suit does not name MasterCard, does not name Visa and MasterCard's member banks and is not a class action.

Retailers contend that rapidly rising interchange fees are a serious problem, costing retailers and consumers an estimated $20 billion or more each year. Kroger, for example, expects to pay credit and debit interchange fees of approximately $350 million this year, up more than 215 percent from five years ago. During that period, Visa has raised Kroger's interchange rate 11 times. Interchange fees reportedly cost the average U.S. household more than $230 a year.

At the same time, consumers are increasingly reliant on credit and debit cards. In 2003, for the first time ever, electronic payments comprised more than 50 percent of Kroger's sales. Today, over 60 percent of Kroger's overall transactions are made via credit or debit cards.

"The collective setting of interchange fees by Visa and its member banks constitutes horizontal price-fixing that leads to higher retail prices for our customers," said Paul Heldman, Kroger senior vice president and general counsel. "This hidden cost must be borne by all Kroger customers, whether they pay for their groceries with cash, by check or by debit or credit card. At a time when technology has made card authorization and processing faster, cheaper, safer and more efficient than ever, we believe that our customers should be receiving the benefit of declining interchange fees. Instead, Visa is using its extraordinary market power to profit at our customers' expense."

The National Retail Federation welcomed the lawsuit. "Everybody knows that credit card companies charge monthly interest to cardholders,” NRF president and CEO Tracy Mullin said. “But what most people don't know is that they also charge a fee to merchants and effectively require that we include it in the price of merchandise regardless of whether it's paid for by cash or credit. That drives up prices for everyone and is especially unfair for customers who pay cash.

"These fees range from pennies to a few dollars on an individual transaction, but they add up to billions of dollars nationwide every year and the amount collected has nearly doubled in the last half dozen years alone," Mullin said. "The credit card companies already earn huge profits from interest. There's no justification for them to double-dip into consumers' pockets."